ISLAMABAD: The Federal Board of Revenue (FBR) has proposed a new definition of the toll manufacturing in the Income Tax Ordinance 2001.
The new definition has been proposed under the draft amendments in the Income Tax Ordinance, 2001 for simplification and harmonization of tax laws.
According to the proposed amendments to the Income Tax Ordinance 2001, the “toll manufacturing” means a process in which raw material or semi-finished goods are supplied by a person designated as the ‘Principal’, to another person designated as the ‘toll manufacturer’ for converting these into the required product that are to be returned to the Principal.
The draft amendments to the Income Tax Ordinance 2001 further revealed that the toll manufacturer as specified shall make all possible efforts to ensure that the principal has discharged his obligation as a withholding agent in respect of the raw materials and semi-finished products provided for toll manufacturing.
Copyright Business Recorder, 2023
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